JG Summit core profits rise 19% to ₱1.7 B in H1

JG Summit Holdings, Inc. (JGS), one of the largest and most diversified conglomerates in the Philippines, registered a 19 percent growth in core net income to ₱1.7 billion for the first half of 2021.

In a disclosure to the Philippine Stock Exchange the firm said higher core earnings came as the group bounced back from the first full lockdown in the second quarter of last year.

The recovery is also evident in the quarter on quarter (QoQ) surge in core net income from ₱295 million in the first quarter of 2021 to ₱1.4 billion in the second quarter of the year.

The strong volumes and higher margins in JG Summit Petrochemicals Group (JGSPG), sustained EBITDA improvement across Robinsons Land Corporation (RLC)’s divisions and net interest margin expansion in Robinsons Bank Corporation (RBank), offset the negative impact of the pandemic to Cebu Air, Inc. (CEB)’s bottomline.

Excluding airline, first half 2021 core net income grew 68 percent year on year (YoY) to ₱11.0 billion, which is already 24 percent higher than first half 2019 core profits of ₱9 billion.

“Despite the lingering impact of the pandemic, we have successfully kept our food and banking revenues stable while we continue to exhibit strong recovery on businesses that had been more severely affected by the first enhanced community quarantine (ECQ) in 2Q last year namely real estate and petrochemicals,” JG Summit President and CEO Lance Gokongwei said.

He added that, “Given the sequential recovery, we are happy to note that most of our subsidiaries’ topline have already surpassed their average 2019 pre-COVID levels.”

Gokongwei also noted that, “Our airline unit, Cebu Air, Inc. remains challenged given ongoing travel and mobility restrictions. This business however is well positioned to remain competitive and together with our new partners IFC and Indigo, have given it enough wherewithal to withstand this tough environment and pivot back to strong recovery post-COVID.”

Incorporating foreign exchange losses, net income ex-CEB ended at ₱10.3 billion in first half of 2021. This is 87 percent higher from the same period last year, boosted by the impact of CREATE Law, and the ₱262 million gain from the sale of JGS’ 30 percent stake in Global Business Power Corporation (GBPC).

JGS profits also rose faster than the group’s consolidated revenues, which increased 9 percent YoY to ₱128.1 billion in the first half of 2021.

The topline growth was mainly driven by higher plant utilization rates in JGSPG, Chengdu’s contribution and recognition of lot sales in RLC, recovering passenger flights and higher cargo yields in CEB, as well as higher earnings from its core investments in Meralco and PLDT.